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Break-Even ROAS Calculator

Find the ROAS your ads need to break even, the most you can pay per order, and the ROAS that hits your profit target.

One order

Averages per order from your store or ad account.

$

What a customer pays, before refunds.

$
$
$

Apps billed per order, inserts, fulfilment.

Fees & refunds

Defaults are Stripe's standard US card rate: 2.9% + $0.30.

%
$
% of orders

Share of order value you give back.

Your goals

Optional: a profit target and your current ROAS to compare.

% of order value

0 to just break even.

×

From your ad account, e.g. 2.5. 0 to skip.

Break-even ROAS

1.99×

Every $1 of ads must bring in $1.99 of sales to break even (199% ROAS).

$30.16

Break-even cost per order (CPA)

50.3%

Contribution margin

2.48×

Target ROAS for 10% profit

$24.16

Target cost per order

Where each order's money goes

  • Product cost$18.00 · 30%
  • Shipping & packaging$6.00 · 10%
  • Payment fees$2.04 · 3%
  • Refunds$1.80 · 3%
  • Other costs$2.00 · 3%
  • Left for ads and profit$30.16 · 50%
Order value$60.00

How we calculated this

  • Contribution margin = order value − product cost − shipping − payment fees − refunds − other costs per order.
  • Break-even ROAS = order value ÷ contribution margin. At that ROAS, ad spend uses up the whole margin.
  • Break-even CPA is the contribution margin: the most one order's ads can cost before you lose money.
  • Target ROAS = order value ÷ (contribution margin − target profit per order).
  • Fixed costs (rent, salaries, software) aren't included: they're paid from the profit above break-even.
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How this works

Break-even ROAS is your order value divided by what each order leaves after product, shipping, payment fees, refunds and other per-order costs. The payment fee defaults to Stripe's standard US card rate.

Last reviewed

Sources

FAQ

Break-even ROAS = average order value ÷ contribution margin per order, where contribution margin is the order value minus product cost, shipping, payment fees, refunds and other per-order costs. A $60 order that leaves $30 has a break-even ROAS of 2×. As a shortcut, it's 1 divided by your margin as a decimal: a 25% margin needs 4×.

It's the return on ad spend at which your ads pay for themselves and nothing more: every $1 of ads brings back exactly enough sales to cover the ad and the costs of the orders it produced. Above it you make money on each order; below it every sale from ads loses money.

Any ROAS comfortably above your break-even ROAS. There's no universal number, because it depends on your margins: a 3× ROAS is very profitable at a 60% margin and loses money at a 25% margin. Set a target profit in the calculator to see the ROAS that hits it.

Use the landed cost of the product (what the supplier charges, including their shipping to the customer), plus your payment processor's fee and your refund rate. Dropshipping margins are often thin, so break-even ROAS tends to be high; that's why it's worth checking before scaling a campaign.

They're the same limit seen two ways. Break-even CPA is the most you can pay in ads for one order (your contribution margin in dollars). Break-even ROAS is the order value divided by that CPA. Ad platforms report both, so the calculator shows both.

Guides for this tool

Coin going into a funnel with more coins coming out
Break-Even ROAS Calculator

What Is a Good ROAS? Start With Your Break-Even Number

A 3× ROAS can be very profitable or lose money on every order. It depends on your margins. Here's how to work out the ROAS your ads need to break even, and the one that hits your profit target.

Hamza Iqbal

7 min read

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